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House Dems to introduce estate tax measure
House Democrats said Thursday they would introduce legislation next week to return the estate tax to less generous 2009 levels.
The estate tax legislation, which a release said would drop Monday, comes as House Democrats are pushing a Senate-passed bill that would extend Bush-era tax rates for family income up to $250,000 a year. It also will be released after Senate Democrats dropped an estate tax plank from their measure to help maximize support.
In their release, Ways and Means Democrats said their proposal, which would increase the top estate tax rate back to 45 percent and lower the exemption to $3.5 million, would shield 99.7 percent of estates from any liability.
The current top rate is 35 percent, with a $5 million exemption, indexed for inflation after 2011. Unless Congress acts, the estate tax will revert to a $1 million exemption and a 55 percent top rate.
House Republicans have prepared a bill that, much like a similar GOP proposal in the Senate, would continue the current estate tax parameters for another year. The House is expected to vote on that measure next week, as well as an alternative modeled after the Senate Democratic package.Many Republicans would also like to altogether scrap the estate tax, which they deride as the death tax.
Sens. Mark Pryor (D-Ark.) and Jon Tester (D-Mont.) joined McCaskill on that legislation, and Sen. Ben Nelson (D-Neb.) told reporters Thursday that he would also like to see current parameters extended.
Senate Democrats had originally included the 2009 parameters, which President Obama has also backed, in their tax measure. But Majority Leader Harry Reid (D-Nev.) took that proposal out last week, in his push to secure the support of a majority of the Senate.
“The estate tax, we did the right thing in this. There is some with Democrats and Republicans, some concern over how we should approach this,” Reid told reporters Thursday. “That's why Sen. McCaskill introduced her own bill. But this is an issue that we'll have to put over to a later time, and I think rightfully so.”
In the meantime, Republicans have ripped the Senate Democratic proposal for not standing in the way of the estate tax increase due at the end of the year.
Senate Minority Leader Mitch McConnell (R-Ky.) also said this week not to count on a stand-alone bill on the estate tax making it very far.
That means a solution on the estate tax – like many other tax and fiscal issues – would likely be hammered out during the lame-duck session.
On Thursday, House Democrats also plan to introduce a measure identical to the tax legislation the Senate passed on Wednesday, by a 51-48 margin.
The proposal, in addition to cutting off Bush-era rates at $250,000, also raises the top rates on capital gains and dividends, and also extends expansions of tax breaks like the Earned Income Tax Credit.
Since passing their bill, Senate Democrats have urged the House to follow suit, saying that Congress agrees on extending tax relief for the middle-class and was one vote away from making that happen.
Democrats have also accused Republicans of holding up middle-class tax cuts in an attempt to save tax relief for the wealthiest.
Rep. Sandy Levin (D-Mich.), the ranking member at Ways and Means, echoed that thought on Thursday, telling reporters House Democrats would give a full-throated endorsement to the Senate bill.
“Universally, we support the Senate bill,” Levin said, adding: “You’ll hear it very strongly, very vehemently.”
House Speaker John Boehner (R-Ohio) said Thursday that Democrats would be allowed to put forward the Senate-passed bill next week.
But the measure stands little chance in the House, with Republicans saying that no one’s taxes should go up in the current economy, and that Democrats are targeting some 940,000 small businesses for a tax hike.
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